As the eurozone debt crisis continues, car sales in the region continue to falter.  May was the 8^th consecutive month of slumping sales as year-over-year new registrations are down 8.7%.  In Greece, Spain, and Italy, car sales have plunged 47.3%, 8.2%, and 14.3% since last year, respectively.  Unexpected slumps are also occurring in the more financially stable countries, Germany (-4.8%) and France (-16.2%).  Unfortunately the higher end car makers, which tend to be European and North American, are bearing the brunt of the recession.  The only car makers who are doing well in Europe are Asian companies that offer low-cost, fuel-efficient cars (such as small hybrids).  In a weak and unpredictable economy, this is possibly one of the more predictable developments; people are seeking vehicles that are low-cost, reliable, and cheap to maintain.

Though the European and American automakers may not be able to compete at the same price points as Asian companies, European makers are pushing into new business models that may make “vehicle ownership” in some big cities obsolete.  In tough times, vehicle ownership, with insurance, maintenance, parking, and registration costs alongside rising fuel prices, is not as attractive as it once seemed.  Understanding this, Daimler has taken all the “not fun” aspects out of vehicle use through the car2go car-share program.  The program launched in 2008 in the small German city of Ulm, with 50 gasoline Smart ForTwo’s.  Since then it has expanded operations to 16 cities in North America and Europe and will expand to three more this year.  Two of the cities use all-electric ForTwo models.

Car2go charges by the minute, has no monthly membership fees, and most importantly allows users to park the Smart ForTwo’s anywhere in a given service area.  This last aspect, known as “free-float parking,” distinguishes the program from other typical car share services like ZipCar and eGo Share, which require users to return the vehicles to specific reserved parking spaces.  Free float is fundamental to the program’s success because it a) allows users the option of one-way trips, and b) enables flexible scheduling, in that users are not paying for the amount of time the car is away from the reserved parking spot – just the time they are driving the vehicle.

Though Daimler was first to the fray with this specific business model, a competitor has now emerged.  French automaker Renault launched four EV platforms this year and is now trying to figure out exactly how to sell them.  One method the company uses is to lease the battery and sell the car (see earlier blog post); the other is a car-share program, Twizy Way.

Twizy is the company’s newest and smallest EV, and Twizy Way is the company’s version of Daimler’s car2go.  50 of Renault’s Twizy’s are undergoing trials in the French town of Saint-Quentin-en-Yvelines.  The program has all the bells and whistles of the car2go program, including “free floating,” but with Twizy Way all the vehicles are electric.  While it’s only a pilot for now, Renault plans to open the program to the public in September.